Ihug's new owner calls for unbundling

The managing director of Perth based iiNet, which yesterday bought Ihug, says New Zealand needs to unbundle the local loop if it wants to see broadband develop.

The managing director of Perth based iiNet, which yesterday bought Ihug, says New Zealand needs to unbundle the local loop if it wants to see broadband develop.

Michael Malone, speaking at the announcement of the merger (see The "i's" have it - iiNet buys ihug for $30 million plus shares) says iiNet will be making a submission to the Telecommunications Commissioner on the matter.

"About a year ago New Zealand and Australia were pretty much level with regards to broadband. Today Australia has about four times the level of New Zealand and that's simply down to New Zealand not unbundling," says Malone.

Malone says it's not a matter for Ihug or iiNet but for all New Zealand broadband users.

The commissioner is expected to release his draft determination into unbundling on Friday. His final report to the government is due before the end of the year and government will then decide whether to accept his findings or not.

Unbundling has worked well for iiNet in Australia where it is the second largest DSL supplier behind incumbent Telstra. Malone hopes to bring the services to New Zealand should unbundling be mandated here.

In Australia iiNet's Bliink broadband service starts from $49.95 for a 256Kbit/s service capped at 1GB of download traffic per month with an additional gigabyte of what the company calls "Bliink time", basically off-peak hours between midnight and 8am.

Uploading is free. Excess traffic isn't charged by the megabyte as it is in New Zealand but is instead slowed to 72Kbit/s. If even more traffic is downloaded from that point on, the connection is slowed further to 33Kbit/s. A service running at 512Kbit/s with 10GB of download traffic and a further 6GB of "Bliink time" costs $79.95.

By contrast, Telecom's JetStream 256 Home 500 service costs $59.95 a month, has a limit of 500MB per month and excess traffic is charged at 20 cents per megabyte. Telecom's service is 256Kbit/s each way, whereas iiNet's is 256Kbit/s for download and 64Kbit/s upload. Telecom doesn't have a 512Kbit/s offering.

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